In Testing Controls Over Invoices an Auditor Discovers That in 10

question 47

Multiple Choice

In testing controls over invoices an auditor discovers that in 10% of her statistical sample invoices were sent for full shipments, even if shipping documents suggested partial shipments.In this case, she would likely:

• A)Increase her sample size to determine the extent of the control weakness.
• B)Recalculate control risk to determine if there is any effect on the nature, timing or extent of her yearend procedures.
• C)Conclude that controls are working at 90% effectiveness and classify control risk as low.
• D)Consult with her partner to consider launching a fraud investigation.

Recognize the importance of aligning advertising appeals with brand image and positioning.

Identify the key components and first steps in developing an advertising program.

Comprehend the role and impact of fear appeals in advertising.

Understand the guidelines and potential problems associated with using specific appeals in advertising.

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Definitions:

Negative Income Elasticity

A condition where the demand for a good decreases as the income of the consumer increases.

Inferior Good

A type of product whose demand decreases when the income of consumers increases and vice versa.

Demand Coefficient

A measure that indicates the sensitivity or responsiveness of the quantity demanded of a good or service to changes in its price.

Normal Good

A good for which demand increases as the income of individuals or the economy grows, and decreases when income falls.